ICT product prices to rise with GST, says Pikom

by **Cals** Tue 08 Jul 2014, 08:47

Business & Markets 2014

Written by Supriya Surendran of theedgemalaysia.com

Monday, 07 July 2014 10:23

KUALA LUMPUR: Information, communication and technology (ICT) goods will likely see a rise in prices once the goods and services tax (GST) comes into force next April 1, said the National Information and Communications Technology Association of Malaysia (Pikom).

“Some of the IT goods will be affected, simply because currently we are enjoying zero sales tax, and we have been trying to replicate this for the [upcoming] GST but it will be highly unlikely,” Pikom research committee chairman Woon Tai Hai told reporters after the release of the Pikom ICT Job Market Outlook 2014 report last Friday.

On the positive side, the new consumption tax will boost income for the ICT industry from the expected upgrade and revamp of business systems to be GST-compliant.

“The imminent implementation of GST will provide an impetus to the ICT industry for 2014 and 2015, as organisations rush to replace and upgrade their systems to be in compliance with GST requirements, resulting in a [rise in] demand for software developers,” said Woon.

Given the positive outlook for economic growth in Malaysia, Pikom chairman Cheah Kok Hoong forecast that the ICT sector would grow by 10% to 12% in 2014, with a salary growth of 8.7%.

According to Pikom, the average salary for ICT professionals last year rose by 7.2% to RM7,152, from RM6,673 in 2012.

The oil and gas sector remained the highest-paying industry for ICT professionals, with an average salary of RM8,324.

This was followed by the science and technology industry at RM8,089, transport industry (RM7,917), automotive industry (RM7,903), and services industry (RM7,755).

But regionally, Malaysia lags behind China, Thailand and Vietnam, which respectively offer 2.03, 1.43 and 1.50 times higher remuneration for ICT professionals.

Hence a continuing concern is the issue of “brain drain” within the industry, said Cheah, who is also chief executive officer of Hitachi Sunway Information Systems Sdn Bhd, a joint venture between Hitachi Systems Ltd and Sunway Technology Sdn Bhd.

If left unchecked, it would potentially impact the national agenda to become an advanced and high-income nation under the 10th Malaysia Plan, he said.

This article first appeared in The Edge Financial Daily, on July 7, 2014.